A recent study by Alice Annelin and Tobias Svanström, published in the International Journal of Auditing, delves into the complex effects of diversity within audit teams on both work quality and affective state outcomes. This research highlights how diversity in audit teams can simultaneously enhance and hinder different aspects of audit performance.
The study explores diversity through two lenses: variety and separation. Diversity as variety refers to the inclusion of team members with different characteristics and backgrounds, which can bring in a wide range of perspectives and improve decision-making and performance. Conversely, diversity as separation pertains to the division of team members into different categories, potentially leading to conflicts, increased stress, and higher turnover intentions.
The researchers collected data from a Big 4 audit firm in Sweden, involving responses from 335 individuals across 185 audit teams. They found that while team diversity can improve affective outcomes such as role stress, satisfaction, and turnover intentions, it can also negatively impact work quality outcomes, including dysfunctional behavior, performance, effort, and perceptions of audit quality.
This duality in outcomes underscores a significant paradox in team diversity. On one hand, diverse teams benefit from a variety of perspectives that can enhance problem-solving and innovation. On the other hand, the categorization and potential conflicts arising from diversity can undermine team cohesion and effectiveness.
The study’s findings suggest that audit firms need to carefully manage team diversity to harness its benefits while mitigating its drawbacks. This involves not just assembling diverse teams but also fostering an inclusive environment that minimizes conflicts and leverages the strengths of all team members.
By exploring the nuanced impacts of diversity, Annelin and Svanström provide valuable insights for audit practitioners and researchers, emphasizing the importance of balanced and well-managed diversity in audit teams.
For those interested in the detailed findings and broader implications of this study, the full paper is available here.